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Financial Services Report China 4th Quarter

  • ID: 2139146
  • Report
  • Region: China
  • 30 Pages
  • The Economist Intelligence Unit
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The next five years are likely to be a period of considerable change for China's financial services industry. The government, led by Xi Jinping, who was appointed president in 2013, is on a drive to reform indebted public-sector enterprises, internationalise the renminbi, open the capital account and liberalise interest rates. The transition, which complements a desire to shift the overall economy towards domestic consumption, has the potential to produce volatility in both Chinese and international financial markets.

In October 2017 the ruling Chinese Communist Party held its five-yearly national congress, making a number of wide-ranging personnel changes in the process. Mr Xi succeeded in promoting his allies to key positions at the congress, giving him the support necessary to implement a number of financial reforms and adopt tighter monetary policy. However, the tense stand-off between the US and China over trade has undercut production and led to a need for looser monetary policy. The People's Bank of China (PBC, the central bank) has lowered the reserve requirement ratio (RRR) for banks four times this year to counter the slowing economy.

Stresses in the financial system will become increasingly apparent in the forecast period (2019-22). The Economist Intelligence Unit forecasts that economic growth will slow from 6.6% in 2018 to 6.2% in 2019. The first two quarters of 2018 have bolstered our view that the reliance on credit-driven growth is unsustainable and that the government has dialled back its stimulus programme and engineered a readjustment following a reshuffle of the politburo and its seven-member standing committee in October 2017. However, after four RRR cuts by the PBC in the first ten months of 2018 and a strong rhetoric on bolstering a slowing economy, the pattern is clear that the government is focusing more on growth than deleveraging in order to counter the impact of its trade tensions.

Industry List: Asset management, Financial Services, Banking, Financial Services, Financial markets and instruments, Financial Services, Financial regulation, Financial Services, Financial Services, Financial Services, Insurance
Industry Codes (NAIC): 52
Industry Codes (SIC): 60
Note: Product cover images may vary from those shown
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Financial Services Report China 4th Quarter

Overview

Banks

Insurers

Asset managers

Financial markets and instruments

Financial regulation
Overview
Regulatory watchlist

Monetary and currency policy: Monetary policy

Monetary and currency policy: Exchange rates

China at a glance

Fundamental indicators

Key contacts
Note: Product cover images may vary from those shown
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